The Dollar index bounced modestly in N.Y. on Monday, after getting hammered lower last week. The DXY rallied from opening lows of 98.92 to 99.31 highs. The USD touched its worst levels of the day following the Dallas Fed index, which plunged to -70.0 from 1.2, on the back of coronavirus and cratering oil prices. WTI crude traded under $19.40/bbl, the lowest in 18 years. Wall Street bounced however, on the back of extended virus containment plans, and on recently passed U.S. economic stimulus efforts. EUR-USD ranged between 1.1062 at the open to 1.1010 lows. USD-JPY moved between 108.28 and 107.65, while USD-CAD topped at 1.4184, up from 1.4124. GBP-USD peaked at 1.2441, later falling to 1.2355.

[EUR, USD]EUR-USD fell from opening highs over 1.1060, later bottoming at 1.1010. After narrowing sharply following Fed rate cuts and stimulus, interest rates spreads between the U.S. and Europe have steadied above lows seen last week, which has benefited the Greenback today, and marks the first down-day for the pairing since March 20. For the remainder of the week, the USD may run into headwinds, as the incoming data are likely to paint a fairly ugly picture. Manufacturing ISM, ADP jobs, and BLS jobs reports are all expected to fall sharply. Next EUR-USD resistance comes at the 200-day moving average, currently at 1.1082.

[USD, JPY]USD-JPY has recovered from the near two-week low of 107.13 seen in Asian trade overnight, peaking at 108.30 early in the U.S. session. The paring dipped to N.Y. session lows pf 1-7/65 after the horrific Dallas Fed print, since recovering as Wall Street rallies sharply. Japan's fiscal year end comes on Tuesday, and will likely keep the JPY in chop mode, as rebalancing flows are set to continue. The start of April can be expected to see USD-JPY return to its negatively correlated relationship to risk taking levels.

[GBP, USD]Cable gains seen last week stalled on Monday, with the pairing remaining below the two-week high of 1.2485 seen Friday, and ranging between 1.2441 and 1.2355 in N.Y. About two thirds of the rebound from the major-trend low reflected a broader turn lower the dollar last week. We expect the UK currency to remain vulnerable so long as global markets remain apt to risk aversion, or at least unable to sustain rebounds, which might prove to be the case while there remains uncertainty about the duration major economies will remain in a state of lockdown. Brexit also remains a blot on the pound's landscape with Boris Johnson's government aiming to take the UK out of its special transition membership of the EU's customs union and single market at the end of the year, which would put a large part of UK trade on less favourable WTO terms.

[USD, CHF]EUR-CHF eased back to 1.0564, after recovering to over three-week highs of 1.0654 on Thursday, as risk-off conditions returned following three-straight days of equity rallied. Safe haven demand for the CHF will likely continue on and off amid heightening concerns about the global economic disruptions being caused by efforts to contain the coronavirus.

[USD, CAD]USD-CAD rallied from early Asian lows of 1.3988, topping at 1.4184 in early North American trade. WTI crude's slide to 18-year lows of $19.86 has been a driver of the pairing's advance, though Canadian heavy crude prices have collapsed to under $5/bbl over the past few sessions, prompting production shut-ins. The cost of shipping Canadian oil to refiners now exceeds the price of the oil, according to Bloomberg. The prospects for a quick rebound in oil prices remain bleak, given the COVID-19 backdrop, and as a result, the CAD should remain under pressure.